Tripping On The Ladder

 By Jenaissance
 (c) January 14, 2010

Starting a new business is an exciting, thrilling opportunity—but, if you’re not careful, your new venture can easily drain your finances before you even earn a penny in profit.

In Tuesday’s issue of “The Daily Rung,” I shared with you a few tips for knowing what to spend your money on when forming a new small business. And now it’s time to consider a few places where you can save money.

Part II: Where You Should Save

Furniture
Unless you are expecting clients to visit your office, you really don’t need much in the way of office furniture—at least, not right away. If you’re working from home, you’ll probably need a desk with ample work space, a good ergonomically sound chair (since you’ll presumably be sitting in it much of the day) and a file cabinet, preferably one that locks and is fire proof.  

Be sure to set up some space that is dedicated solely to your work. In other words, your work desk shouldn’t double as the gift-wrapping table and the poker night table, and the keep the kids and the dog away from it, too. In a home office, it’s critical to keep your work space separate from your living space. Not only will this help keep you organized, but it’s also a requirement by the Internal Revenue Service (IRS) if you are planning to claim home office deductions on your annual income tax return.

If you need to equip a new office, Craigslist, office furniture resale stores and Target and other discount retailers offer low-budget solutions. And even if what you come up with is hardly a matched set, if aesthetic is important to you, never underestimate the power of a good can of spray paint to give all the pieces a cohesive look.

Phone Bills
Depending on your line of work, you may or may not need to have a dedicated telephone and/or telephone number. So much business these days is transacted via e-mail that, if you have to make a choice, it might make sense to invest in a high-speed Internet service first, rather than a phone line. If you plan to use a cell phone for business purposes, ask your wireless service provider to give you a special rate by bundling it with your current calling plan. If you use a land line, consider purchasing prepaid telephone cards to make long-distance phone calls rather than paying for costly long-distance service.

And, there are many great services available—Skype being one of them—that offer free web conference services so you can hold virtual meetings with colleagues and clients without spending a cent, and all from the comforts of “home.”

Advertising
As soon as you announce that you are open for business, you will likely be on the receiving end of endless solicitations to advertise your new business.  Whether it’s a representative from the Yellow Pages, the community “shopper” newspaper, or the latest fad in online advertising, the solicitations will come. These sales people have a job to do—and goodness knows it requires persistence on their part—but that doesn’t mean you should just hand over your wallet, either.

Before you consider any kind of advertising for your business, revisit your business plan. Who are the customers you are hoping will hire you? And where are they? If you are trying to appeal to a niche market, chances are good that your prospective customers won’t be looking for you in the Yellow Pages. Likewise, if your target customers aren’t Web users, then online advertising may not help you reach the right folks.

Advertising, when done carefully and selectively, can really help your business development efforts. Advertising, when done foolishly or without a plan, is like watching your money run straight out the door. Be selective—and, if you’re really unsure, there’s no harm in trying some other business generating activities first (phone calls, face-to-face meetings) before considering alternate forms of getting the word out.  

 By Jenaissance
 (c) January 12, 2010

Starting your own business is an exciting, exhilarating leap of faith—and a very empowering one, at that.

If you’re like most sole proprietors in the start-up phase, however, you will want to save every penny that comes in the door and choose your expenses carefully…at least until your revenue grows. That doesn’t mean you won’t one day have that shiny office with an expansive view of downtown and your name stenciled on the door in gilded paint. It does, however, mean you may need to make do with a less glamorous set-up until your business grows to a profitable and sustainable level.

In this two-part series, we explore where you should spend—and where you can save—when starting your new small business.

Part I: Where You Should Spend

It’s tempting—and generally wise—to cut corners when starting a small business and to choose your expenditures wisely, since it’s likely that you may not have a lot of seed money to start with and it may take awhile before revenue comes marching in the door.  Don’t make the mistake of cutting corners on absolutely everything, however. Here are the things—in my own humble opinion–that you should never scrimp on (even if you’re tempted):

Legal services.
Going to law school and, later, working as the communications director for two large law firms taught me a very important business lesson: Don’t make a big business move without first consulting with a business lawyer. It’s important to find someone you trust, who has demonstrated experience helping small businesses like yours, and whose fees are palatable to your pocketbook.  A good business lawyer will help you structure your new business in a way that makes the most sense for your business objectives, keep you on the right side of the law in your jurisdiction, and protect your business from unforeseen legal issues down the road.

This will probably be one of the biggest expenses you will incur during the start-up of your small business. Lawyers are expensive. (One reason is because, as my husband likes to say, “If the work was fun, people would do it for free.”) Just gulp now and accept it. But legal planning now will save you time, and perhaps costly problems and unforeseen “surprises,” down the road. It’s kind of like going to the doctor:  a full work-up now will keep you on the healthy path toward the future.

You may also need an intellectual property lawyer to help you file any trademarks or service marks that you are developing as part of your new business. You may want to do this as soon as possible after meeting with your business lawyer, since filing trademark applications takes time and is a fairly slow and tedious process—not to mention that you will want to protect your intellectual property from the very beginning of your business venture.

Accounting and tax services.
Uncle Sam is not always the friendliest guy. Not if you mess up your taxes, that is. Spare yourself the guess-work and hire a good certified public accountant (CPA) with small-business experience to guide you through the tax process. It pays to start building a relationship with a CPA you trust; as your business grows, your accounting and tax needs also will grow in scope and complexity and you will want to rely on someone who’s been with you from the beginning, who understands your business goals and who can help you navigate complex tax laws (which seem to be getting more complicated with each passing year).

In the same spirit, invest in a good accounting system for your business so you can be organized and effective in invoicing clients, paying your bills, and staying on top of your cash flow. QuickBooks offers several easy-to-use solutions, including a starter version that is free and can be upgraded as your client base—and your business needs—grow.  

Marketing basics.
It’s worth it to spend a little money on developing a brand for your new business, followed by a simple business card and Web site so that potential customers have a way to find you. My 10-plus years in the marketing and communications arena have given me a very strong bias, which I will share with you here: Hire an expert to help you. Don’t try to do this yourself if you don’t know what you’re doing. Being able to create circles in Microsoft Word does not make you a designer and plugging words together does not make you a writer—and, if done poorly or sloppily, it will make you look ridiculous. And, for pete’s sake, that handwriting font that looks like a little kid scribbled with a pencil should be outlawed. Just…don’t go there.

Hiring a graphic designer, a writer or a marketing/communications consultant can make all the difference between giving the impression of being a strong, successful, professional, contemporary business or a rinky-dink, unprofessional business that’s running out of someone’s back bedroom…and looks like it. And, frankly, if you are a client seeking to hire a sole proprietor, which company will you trust more with your business, based on first impression alone?

You need not hire a costly agency to help you. There are some outstanding freelance designers, writers and consultants (I like to think I am one of them) who have award-winning experience and who, because they are freelancers with low overhead, can offer you a better price than some of the flashy agencies and creative services firms. Some may even be willing to barter services with you as a cost-effective solution.

A post office box.
If your office is in your home, you will want to consider renting a post office box from the local post office or mailing-related store (such as Mailboxes, Etc., or The UPS Store). Since you will want to keep your personal mail separate from your business mail, this is one way to ensure that happens. And, if you work from home, you probably won’t want to broadcast your home address to strangers who visit your Web site. A p.o. box gives you a business presence, and a place to direct your mail, while protecting your privacy at home. Generally, post office boxes are available in a variety of sizes and the cost to rent a box is commensurate with the size.  

Stay tuned for Part 2 in Thursday’s issue of The Daily Rung, where we highlight some areas where you should save money in starting up your new business venture.

 Guest Column by Rebecca Love Williams
 (c) January 1, 2010

I hope that you all had a very happy holiday filled with peace, love and joy. Now that the new year is upon us, it is time to really think about the New Year that is approaching us.

Have you started writing your Life Plan for 2010 to allow you to get a “fresh start”?

A Life Plan is a written plan of your goals and objectives in your life. It is like a map or guide to help you achieve your inner desires. Your plan can be divided into eight areas:

• Career
• Environment
• Family and friends
• Health
• Leisure
• Love and relationships
• Money and finance
• Personal development or personal growth

Each of these areas affects your life and the importance of each one will vary depending on your internal values and situation.

Here are a few questions you might want to ask yourself while writing your plan:

• What’s most important to you, your core values?
• What do you dream about?
• Where on your career path do you desire to be?
• Is your employer helping you accomplish your personal career goals?
• Are you still having fun at work?
• Will it allow you to spend more time with your family?
• Are you spending enough time with people who are important to you?
• How can you maintain your health?
• Do you have the time and the resources to entertain and travel?
• What places do you want to visit in the next two to three years?
• How much money do you want to make?
• Does your current employment support your income goals?
• How much do you need to save for your later years?
• Are you giving back to your community?
• Where do you want to live?
• Are you continually developing and improving your relationship?

These questions will give you some starting points to think about as you begin developing your plan for 2010. Of course, Life Plans can be more complex, and if you would like to develop a more intense life plan, you might need to seek out a Professional Coach.

ABOUT THE AUTHOR:
Guest columnist Rebecca Love Williams, principal of Williams Business Solutions, is an experienced professional coach and human resources  consultant. She regularly coaches her clients through a process to help them achieve their life and professional goals, including an emphasis on life planning strategies. Williams is based in Evanston, Ill., and serves individuals and businesses nationwide.

 By Jenaissance
 (c) December 15, 2009

Whether you’ve recently been let go at work or whether you are finally pursuing your dream of small business ownership, chances are you’re saving your pennies right now.

It wasn’t that many years ago that saving money involved stuffing a sock with extra cash and hiding it under the mattress. Thankfully, we’ve all become much more creative since then, as these three new online resources—a must read for everyone interested in managing money—will surely attest.

WiseBread: Living large on a small budget
www.wisebread.com

Its name says it all: Be smart about your money. This blog and online community, a member of the larger Money Tips Network of finance-related blogs and news sources, leads readers on a journey toward frugal living, one lifestyle choice at a time.

WiseBread publishes a daily blog featuring a vast library of articles written by an extensive team of finance bloggers and money experts. A sampling of recent articles include:

• “The cell phone app that’s saving me a fortune”
• “The best way to avoid the worst financial problems”
• “6 powerful strategies for paying down debt”
• “Things you should and shouldn’t buy at Walmart”

In addition, WiseBread features a weekly “deals of the week” round-up and frequent contests in which readers are invited to submit their own frugal tips and the tipsters with the most innovative suggestions can win a prize.

Mint.com: The best (free) way to manage your money
www.mint.com

No matter how much of it you have (or don’t have, as the case may be), managing personal finances is often no small task. But Mint.com, a new financial web site, actually makes it easy…and fun! This free and secure online service allows users to manage bank and credit accounts; develop budgets; and manage investments—all in one place. (Just think: No more jumping from one web site to the next when trying to balance your finances.)

What makes Mint.com particularly invaluable is its built-in system of alerts, which includes a weekly e-mail to notify you about the status of your savings, credit and investment accounts, plus alarms that will help you avoid overdrafts, late fees and even changes to your interest rate that the bank might otherwise prefer you not notice. And, with its expansive graph system, Mint .com can also help identify areas where you might save more and spend less.

And, it’s not just us at Tripping on the Ladder who love Mint.com. It also was honored as a “Four Star” service by Money Magazine, named PC World’s Top-Rated Online Finance Service and recipient of PC Magazine Editor’s Choice Award, and listed among TIME Magazine’s Top 50 Web Sites. 

Get Rich Slowly: Personal finance that makes cents
www.getrichslowly.com

Recently named the most inspiring personal finance blog by Money Magazine, Get Rich Slowly is a spirited online community devoted to promoting sensible personal finance. The site was created by a self-professed “average guy” who found himself in tens of thousands of dollars in debt. So, he decided to do something about it, first by reading every personal finance book and resource he could find—and then by sharing what he learned so that others, too, could benefit—one small step at a time.

The site features regular bank rate comparisons, customized mortgage quotes, articles on home and mortgage topics (our favorite: “Furniture and Scambags: Adventures on Craigslist”) and lively message boards where readers share their best tips and wildest experiences relating to personal finance.

Ultimately, Get Rich Slowly is a story of a nice guy finishing first, for himself. And, really, what’s not to celebrate about that?

 By Survivor Gal
 (c) November 30, 2009

Here’s some unconventional advice to help you prepare for the storm. Because it’s coming.

Watch the various “Real Housewives” shows on Bravo. They’re vapid, but a secret pleasure for enough viewers to not only keep them on the air, but expand the franchise. But, turns out, the purported prosperity of the housewives was about as real as their, well, cleavage. Out goes The Good Life of boats, bling, and BMWs. In comes the Really Real Story: foreclosure, eviction and short sales.  

They are the It Girls for Schadenfreude, circa 2009. We’re watching them fall and getting what we’ve long suspected is their spending-beyond-one’s-means due.

But you may have more in common with the phony fill-in-the-blank set than you’d like. The average U.S. household credit card debt is $10,700; typical consumers have eight credit cards apiece. And, if you’re part of Generation X, generally defined as born between 1965 and 1976, you – deservedly or not – are part of what’s called Generation Debt, collectively unwilling or unable to deny your wants and plummeting into the red.

Change course now.  The odds are not in your favor.   

Whatever your generation – Boomer, Gen X, Millennial – job loss will hit you. You’ll get laid off, whether you saw it coming or it blindsided you. You’ll accept a job that sounded great until it was yours. Your spouse will get canned. Or, on a particularly sad note, your parents – providers of the occasional check – will be able to offer you nothing but love after layoffs hit them.

Welcome to the inevitable new reality. And, yes, it does bite.

But you have some control over how hard it bites.

Survivor Gal has been laid off three times over two decades, most recently a year ago. In 2003, she became a homeowner and mortgagee. That made it harder for her sleep after Layoff No. 3 and grateful to have landed a new job within five months. Lots of decent folks aren’t as lucky.  

She can also report this about post- No. 3 life: Her car, though it has the sex appeal of a grandma-mobile, was paid for four years earlier; it’s still great under the hood. Her TV, a hand-me-down from her brother, is the size of a fetal Volkswagen but it works. She’d followed the pundits’ recommendations to save enough for six months’ worth of expenses.

The day No. 3 hit, her debt on her two credit cards: zero dollars, zero cents.   

Considering average debt, it’s sadly unsurprising that that the seeds of many a personal financial disaster were sewn by the huge credit card balances that preceded job loss.

Stop. Here’s what you need to do.  Stop thinking of your credit cards as the ticket for what you didn’t save for and cannot really pay for, be it the latest in consumer electronics or the bachelorette weekend in Vegas. Think of them as Tony Soprano.  

They’re not your friends. Granted, credit card companies won’t come after your kneecaps. And what Tony calls “da points,” they call “interest.” But the differences end there. What Tony calls “your debt,” they call “your debt.”

Listen, Survivor Gal is not Sweet Polly Purebred; over the years, she made a couple wrong turns. She wishes, for instance, she’d known the right way to close an unused credit card account, rather than having the company discontinue a zero-balance customer.  

Nor is she pitiless. She’s a Boomer, though vanity prompts her to disclose she’s from the generation’s tail end. Credit card companies deluged Gen Xers’ and Millennials’ undergrad mailboxes with fabulous offers; they never did that to the Boomers.   

So here’s where to start.  

Go to http://money.cnn.com/magazines/moneymag/money101/lesson9/index2.htm, an easy, practical primer on personal finance, and the difference between good debt and bad (credit cards).  

The always-helpful Motley Fool site has this article (despite the title that Survivor Gal loathes) on the right way to close credit cards. Visit  http://www.fool.com/personal-finance/credit/dont-cancel-that-credit-card.aspx

Using Tony for necessities like groceries or housing? Or just need solid info? The Federal Trade Commission steers you in the right direction:   http://www.ftc.gov/bcp/menus/consumer/credit/debt.shtm

Your new friends at Tripping on the Ladder want you to be ready for what’s real. Tony-free. Real people, not Real Housewives.

By Sharon Korbeck Verbeten
(c) November 24, 2009

Yule know there’s a different feel to Christmas this year—the recession-tinged feeling is already in the air and in the store aisles.

While halls and malls are still decked out for the holiday season, the joy of shopping has been overshadowed—for many—by decreased wages, lost jobs or the threat of lessened job security.

Black Friday, indeed. These days that term might refer to the dread some feel about getting a pink slip on the last day of the work week. Still, there are those looking forward to the traditional “Black Friday,” when shoppers, like myself (I’m fueled by seasonal spirit, pumpkin muffins and Mountain Dew!) spring from our beds at 4 a.m. or earlier, eager to get the best deals.

According to the finding of one national survey, retailers are about to embark on the season of the serious bargain hunter. A survey by the National Retail Federation (NRF) found that U.S. consumers plan to spend an average of $682.74 on holiday-related shopping, a 3.2% drop from last year’s $705.01. And two-thirds of Americans indicated the economy will affect their holiday shopping plans this year.

So, what’s a savvy shopper to do? Here are a few well-considered tips.

Stacy Schuster, a sales associate with the GAP stores in Milwaukee, offered her best tip, based on personal experience. “Get a part-time job in retail at a store where you would normally shop,” she said. As an employee, the mother of two saves 50% on all her purchases—great for both personal and gift purchases.

Also a seasoned eBay shopper, Schuster recommends scouring the online auction site for items on wish lists. Bidding competitively—and early—can save a lot off retail prices.

Jennifer Hogeland, a mother of two from De Pere, Wis., also has turned to online shopping this year for most of her purchases, mainly because so many sites are offering free shipping. Shopping online also has a residual benefit, she said. “It avoids the whimsical and unnecessary purchases I’m sure to make if I’m in the store.”

The NRF survey also found that one in 10 holiday shoppers plan to shop thrift or retail shops for gifts this year. That may not only be smart and pocket savvy, but “green” as well.

“Why not recycle and repurpose items you don’t want?” said Pat DuChene, a single mother from Wisconsin. “Our family is doing a grab bag with a ‘trash into treasure’ theme.” Who knew re-gifting—once so uncouth—would now be considered so in vogue?

Now, where did I put that silly—I mean stylish—scarf I got last year…?